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The purpose of this business plan is to raise $5,000,000 for the development of a gold trading company while showcasing the expected financials and operations over the next three years. Gold Trading Company, Inc. (“the Company”) is a New York based corporation that will actively trade gold commodities and physical gold among the many exchanges within the United States and abroad. The Company was founded by John Doe.

1.1 Products and Services

The primary revenue center for the business will come from the direct trading of gold commodities and physical gold on a day to day basis. The Company, through its established relationships with commodities brokers, will be able to amplify its returns through the use of significant leverage for the commodities purchased using the firm’s capital. The business expects that it will use 1:5 leverage on all gold trades executed by the Company. The Company’s secondary stream of income will be derived from interest generated on capital held from short sales that are used in conjunction with the Company’s gold trading operations. Interest income will generate approximately 30% of the Gold Trading Firm’s aggregate revenue. The third section of the business plan will further describe the investment management services offered by the Gold Trading Firm, Inc.

1.2 The Financing

At this time, the Company is seeking to raise $5,000,000 for the development of the Gold Trading Company’s operations. Mr. Doe is seeking to sell a 75% ownership interest in the business in exchange for this capital. 90% of the invested capital will be used for direct investments into the firm’s commodity trading operations. Briefly, the capital will be used as follows: • Gold Commodities trading operations. • Development of the Company’s office. • General working capital.

1.3 Mission Statement

Management’s mission is to develop the Gold Trading Company into a middle market investment company that specializes in trading gold commodities with the intent to realize small, but continuous profits on a daily basis.

1.4 Mangement Team

The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the commodities trading industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.

1.5 Sales Forecasts

Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.

1.6 Expansion Plan

The Company will to undergo an aggressive expansion after the successful completion of the initial capital raising period. As the laws that govern investment pools for gold commodities trading are different than those for general securities dealers/traders, the business may be able to solicit capital from the general public in a similar capacity to that of a registered investment advisory. Mr. Doe is currently investigating how the business can expand once trading operations commence.

2.0 Company and Financing Summary

2.1 Registered Name and Corporate Structure

Gold Trading Company, Inc. The Company is registered as a corporation in the State of New York.

2.2 Required Funds

At this time, the Gold Trading Company requires $5,000,000 of equity funds. Below is a breakdown of how these funds will be used:

2.3 Investor Equity

At this time, Mr. Doe is seeking to sell a 75% interest in the Gold Trading Company in exchange for the capital sought in this business plan. Please reference the Company’s private placement memorandum regarding more information regarding the Company’s fee and ownership structure.

2.4 Management Equity

John Doe currently owns 100% of the Gold Trading Company, Inc.

2.5 Exit Strategy

Management has planned for two possible exit strategies that would yield significant capital appreciation for the Company’s Management Team and Investors. First, the business could be sold in its entirety to a third party entity. At this point, Management would most likely leave the Company to pursue other ventures. The second exit strategy would be to engage a secondary capital raising that would allow Management and Investors to cash out a portion of the equity built into the business while concurrently providing the firm with more capital for trading. This exit strategy would still require that Management operate the firm on a day to day basis, so in actuality it is only a partial exit strategy. However, by raising a secondary or tertiary round of capital, the business could easily expand to become a much larger trading firm after the third year of operations.

3.0 Products and Services

As stated in the executive summary, the business intends to actively trade contracts, swaps, and options related to gold commodities and physical gold. The Company, prior to the onset of operations, will develop brokerage relationships with major commodities brokers that will place and manage trades on behalf of the Company. The business will specially select brokers that can offer the commodities trading firm prime brokerage capabilities which include expanded leverage for the Company’s investments. As discussed earlier, the Company intends to use conservative 1:5 leverage for most of its gold trades. However, most exchanges permit the use of 1:20 leverage for certain commodities. Currency trading can often provide leverage of 1:50 and up to 1:100 leverage depending on the type of trade. Management will only use larger amounts of leverage when the underlying commodities have been properly hedged using counteracting options. One of the primary strategies that the Gold Trading Company intends to engage will be delta neutral trading, which will allow the business to actively purchase options while currently hedging the values of the Company’s gold commodity portfolios. Delta neutral trading allows the firm to generate revenues on commodities (these types of trades are available on all gold commodities) trading simply through the volatility of the underlying positions. With the pace of inflation increasing significantly in the last year, Management sees a significant opportunity to develop substantial profit streams through volatility style trading rather than attempting to determine the direction of any given market.

4.0 Strategic and Market Analysis

4.1 Economic Outlook

This section of the analysis will detail the economic climate, the gold and commodities trading industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Inflation is somewhat of a concern for the Company. As the inflation rate decreases, the purchasing power parity of the American dollar decreases in relation to other currencies. This may pose a risk to the Company should rampant inflation, much like the inflation experienced in the late 1970s, occur again. This event would significant weaken the Company’s ability to borrow funds (should the need arise), but it could also severely impact the gross margins of the business. After the business begins to trade in excess of $20,000,000 per year in revenues, the business may solicit a currency based investment bank to hedge against inflationary risks. This risk has been faced by many companies over the last five years as the value of the Euro/Yuan/Yen has appreciated significantly in its relation to the American dollar.

4.2 Industry Analysis

The financial services sector has become one of the fastest growing business segments in the U.S. economy. Computerized technologies allow financial firms to operate advisory and brokerage services anywhere in the country. In previous decades, most financial firms needed to be within a close proximity to Wall Street in order to provide their clients the highest level of service. This is no longer the case as a firm can access almost every facet of the financial markets through Internet connections and specialized trading and investment management software. With these advances, several new firms have been created to address the needs of people in rural and suburban areas. Within the United States, there are approximately 2,000 companies that independently trade futures and commodities contracts with the intent to generate a profit. Each year, these firms aggregately generate more than $25 billion of revenue while concurrently providing $10 billion of payrolls (including bonuses). More than 60,000 people are employed by the industry.

4.3 Customer Profile

As the Company intends to operate its gold trading operations via the free trading markets within the US and internationally, the Company will not directly have “customers.” In a sense, the customers of this firm are its investors as the Company is trying to develop a wealth and income creating vehicle for them and the Senior Management Team. However, and in the future, the Company may expand its capital base by soliciting additional investments from the general public. In this instance, the Company would need to register itself as a CTA firm with the Commodities and Futures Trading Commission. At this time, it is unclear as to what requirements would be needed in order for an individual to invest with the commodities trading firm as they differ substantially from other private investment vehicles such as hedge funds and private equity groups.

4.4 Competitive Analysis

This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.

5.0 Marketing Plan

As the Gold Trading Company intends to primarily trade for its own account, the marketing required by the business will be absolutely minimal. Mr. Doe’s marketing campaigns will primarily consist of familiarizing the Company’s brand name with other commodities traders and brokerages so that future joint ventures and investments can be made in the future. As discussed earlier, there is the possibility that the business may be able to solicit capital from the general public. In that instance, the Company will engage marketing strategies discussed below.

5.1 Marketing Objectives

• Develop an informative website if the Company decides to solicit capital from the general public.

• Develop ongoing relationships with commodities brokerages within the United States and abroad.

5.2 Marketing Strategies

Foremost, the Company will develop ongoing prime brokerage relationships with several commodities brokerages throughout the United States, Europe, and Asia. This will ensure that the Company can amplify its returns through leverage offered by these firms. Mr. Doe will distribute information, via an information packet, to these firms informing them that the Gold Trading Company is in business, its capitalization, and what types of trades the company most frequently engages. In regards to raising capital from the general public, the Company will develop an informative website showcasing the operations of the firm, Mr. Doe’s experience as a gold trader, proper investment disclosures, and relevant contact information. The website may also feature functionality so that investors can log in and track the performance of their account. If this website is built, the Company will hire an internet marketing firm to properly rank the site via search engine optimization and pay per click strategies.

5.3 Pricing

In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.

6.0 Organizational Plan and Personnel Summary

6.1 Corporate Organization

6.2 Organizational Budget

6.3 Management Biographies

In this section of the business plan, you should write a two to four paragraph biography
about your work experience, your education, and your skill set. For each owner or
key employee, you should provide a brief biography in this section.

7.0 Financial Plan

7.1 Underlying Assumptions

• The Gold Trading Company will have an annual revenue growth rate of 19% per year.

• The Founder will acquire $5,000,000 of equity funds to develop the business.

• The Company will earn a compounded annual return of 17% on its commodities portfolio.

7.2 Sensitivity Analysis

The Company’s revenues are not sensitive to changes in the general economy. The Gold Trading Company will use a number of trading strategies to ensure that the business can generate profits despite increases or decreases in the value of any commodity. As such, the business should have no issues with top line income despite inflationary pressures or downward pricing pressure on specific commodities.